It has taken us 3 years to finally be able to say it but it
is now official . . .
WE ARE DEBT FREE!!!!
Yes, you read that right. We have officially paid off our
last student loan, closing out Baby Step #2. Our debt snowball is now complete.
*HUGE sigh of relief!*
Back in August of 2011, we attended Dave Ramsey’s Financial
Peace University with some family friends who were leading it. Then we were 2
years married, having over $72,000 in debt. How do you ask? A few things come
to mind: stupidity with spending, credit cards, and student loans. The majority
of the debt came from our time in college and
the mountain of debt looked so HUGE.
Ramsey’s program encourages you to follow Baby Steps.
Luckily we were able to tackle Baby Step #1 fairly quickly so we could start
our debt snowball. Baby Step #1 has you set aside $1,000 in Savings as your
safety net – just in case an emergency happens, such as
broken bones or cars breaking down. [Note: Not shopping sprees or dream vacations.]
Baby Step #2 takes Gazelle Intensity and is where it gets
tough. Having to create a budget and actually STICKING to it? Yep – tough stuff
right there. Then actually taking your extra money each month (and FINDING
extra money) and putting it towards your debts. Yikes. And guess what – it hurts.
It hurts knowing that the extra $1,000 or so you’re putting towards your credit
card is going to towards your debt and not a vacation, etc. It’s not meant to
be easy. If it was easy, everyone would be doing it.
It took us 3 years to finally finish Baby Step #2 and we are
so excited about it! We began with our smallest debt and attacked it with all
we had, selling textbooks and anything extra that we could find. We also had to
deny ourselves the things we wanted in lieu of our debt. It’s amazing what you
actually need to live on when you take the time to budget it out. Once we
finished our first debt, we cut that card to tiny pieces and began on the next.
This process repeated time and time again until today. Our final payment to our
final Student Loan went through this morning and we are DONE!
We decided to make a weekend of it and celebrate this accomplishment.
Yes, we planned for the trip and have been watching what we spend while here
and have been utilizing things we already have to make the most of it.
Karl is a scary driver, just saying. ;)
Spending time at the Coyote Drive Inn. Our kind of fun for sure.
Why not?
Our view from this morning - how fitting that we celebrated at Six Flags. To say that our journey has been a roller coaster ride is very accurate. :)
It is so easy when going through something like this to
focus on what you don’t have and letting it get you down. Here is my encouragement
to you if you are wanting to take control of your debt: focus on what you have
and not what you don’t. So much of our success has been from utilizing what we
had available to us and running with it. Examples include selling your extra
stuff that you don’t need any more, reach out to friends and family for help
finding deals on appliances or other things you need, and get creative and
reuse household products. You will be successful with this - it takes time and commitment.
With that being said we have several people to thank for
helping us reach this achievement. First off, let’s start with the Big Guy. I’m
so thankful that He laid this upon our hearts back then and provided for us to
be able to accomplish this. There are so many blessings that have come out of
this stage in our lives and we couldn’t be more thankful. We do serve an
amazing God. Second, we have to thank the Criner’s for taking the time to sit
with us, pray with us, and encourage us in this HUGE endeavor. It means so much
to finally look forward with no debt! Finally, our parents have been there for
us through it all – helping us make the rent at times when it just wasn’t going
to happen, helping us with our down payment on our first home, and the list can go
on and on. Thank you all for what you have done for us!
Now, where to from here? Well,
since we have 7 Baby Steps, onward we go to Baby Step #3: 3-6 months of expenses
in Savings. We probably really should focus on the 6 months of spending but we
have decided that we will begin with 3 months worth for now so we can begin
investing and paying off our house sooner. We greatly look forward to the day
where we can REALLY say we are 100% Debt Free, including our house. And if
everything pans out like we have planned (HA!!!) we will be there in just 6
short years.
The magic behind all this is
making a budget and adapting it to work for you and your family. We sat down
last night and looked deeper into our budget, ironing out the wrinkles, if you
will, and changed it up for probably the 10th time, at least, to help us reach our new goal.
Here are some tips on being successful with your budget:
First, be honest. Right off
the bat you need to be honest with yourself. Your budget will be ugly the first
time, the second time, the third time (you see a pattern there?), especially if
you are not honest about your spending. In other words, if you drive a lot for
work and know that having a budget of $100 for gas isn’t going to cut it then
budget for more. On the other side of the coin, don’t over budget and put a lot
of money in something that you just aren’t going to spend (or need to, ahem).
Second, write down all your debts including their monthly payment amounts. Once you have this information, list them in order from smallest payment to largest payment OR smallest debt to largest debt.
Third, write down all your payments you HAVE to make each month. Once you have those payments listed, then you can work on your cash envelopes. It takes time getting used to the envelope system, but it works. Do it!
Finally, know it will be hard and that it will take time. You will have frustrations. You will mess up. It will not be pretty. People will doubt you and even laugh at you some times. It hurts. But, it’s worth it.
So, what's stopping you? We'd love to help encourage you on your own path to financial peace.
Check out these sites for helpful tools and tips:
Keep at it!! We have been 100% debt free since we moved to Justin. It is freeing!!
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